The Finance Ministry has introduced the third amendment to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2024, which sets the Foreign Direct Investment (FDI) limits for various activities related to satellites.
According to the notification, investee entities must comply with sectoral guidelines issued by the Department of Space.
Under the revised FDI policy, the space sector now allows 100% FDI. Specifically, satellite manufacturing and operation, satellite data products, and ground segment and user segment activities can receive up to 74%FDI via the automatic route. Beyond this threshold, FDI will require government approval.
Additionally, 100% FDI under the automatic route is now permitted for manufacturing components and systems/sub-systems for satellites, ground segment, and user segment.
The notification defines several satellite-related activities. For instance, "Satellites – Manufacturing and Operation" encompasses end-to-end manufacturing and supply of satellites or payloads, including establishing satellite systems and controlling in-orbit operations. "Satellite Data Products" involve receiving, generating, or disseminating earth observation or remote sensing satellite data and associated products. "Ground Segment" refers to supplying satellite transmit or receive earth stations, while "User Segment" involves providing user ground terminals for satellite communication.
These amendments came into effect on April 16, 2024, upon their publication in the Official Gazette.
Originally published 08 May 2024
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